Wall Street closed narrowly mixed Thursday as investors traded cautiously ahead of the Labor Department's Friday reading on December employment. Inflation jitters remained high as oil prices set a new trading record above $100.
Investors who sent stocks skidding Wednesday amid economic concerns and rising oil prices initially took some solace in findings released Thursday by payroll company Automatic Data Processing. The ADP report said the economy added 40,000 private sector jobs last month, above the 30,000 forecast of economists polled by Dow Jones Newswires.
Also Thursday, the Labor Department said the number of newly laid off workers seeking unemployment benefits fell last week. But investors were mindful that these weekly readings can be volatile, and the latest reflected unusual factors related to the Christmas holiday. Wall Street has for weeks been holding out for Friday's December jobs snapshot. The Labor Department report should indicate whether the solid job market that existed last year can continue into 2008 and help sustain consumer spending.
Meanwhile, oil set a fresh record of $100.09 a barrel on the New York Mercantile Exchange after government figures showed a larger-than-expected decline in crude oil inventories. Analysts said more expensive oil is stirring some concerns about rising prices in general and whether the Federal Reserve would still have room to lower interest rates.
"We are worried about inflation," said Nicholas Raich, director of equity research at National City Private Client Group in Cleveland. "That's probably the biggest risk in 2008."
The Dow Jones industrial average rose 12.76, or 0.10 percent, to 13,056.72, after moving higher and lower over the course of the session.
Broader stock indicators were mixed. The Standard & Poor's 500 index stayed steady at 1,447.17, and the Nasdaq composite index slipped 6.95, or 0.27 percent, to 2,602.68.
Light, sweet crude, easing back from its record with the normal ebb and flow of trading, was down 41 cents at $99.21 a barrel on the Nymex.
"There was nothing that was really that helpful in the economic reports today. The jobless claims were a little bit better, but they're still in a sideways pattern ... and the four-week average keeps moving up," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
Bond prices rose as stocks retreated from earlier highs. The yield on the benchmark 10-year Treasury note, which trades opposite its price, dipped to 3.89 percent from 3.91 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
The market was waiting for Friday's jobs report because of the link between employment and consumer spending. A slowdown in spending among consumers fearful of losing their jobs, or not being able to find new ones, would be regarded as a heavy blow to the economy. The continuing rise in commodities prices, including a likely uptick in gasoline prices following spikes in oil, makes some investors nervous about the ability of consumers to keep spending apace.
Stocks drew some support from a Commerce Department report that orders to U.S. factories rose in November by the largest amount in four months. However, an important reading of business investment fell for a second straight month.
Concerns about the health of the overall economy weighed on stocks Wednesday and sent each of the major indexes down by more than 1 percent. The Dow Jones industrials lost more than 220 points.
In corporate news on Thursday, State Street Corp. rose $5.44, or 7 percent, to $84.32 after saying William W. Hunt resigned as president and chief executive of State Street Global Advisors. The move comes as the provider of mutual fund and pension-processing services prepares to book a $279 million fourth-quarter charge related to expected lawsuits over the weak performance of certain fixed-income strategies managed by the investment division.
Monsanto Co. rose $9.45, or 8.5 percent, to $120.92 after saying its first-quarter profit nearly tripled amid a strong performance by its Latin American business. The seed company raised its earnings forecast for the year.
Ford Motor Co. slipped 15 cents, or 2.3 percent, to $6.45 after saying that India's Tata Motors Ltd. was the top bidder for its Jaguar and Land Rover units. Ford said it has begun negotiations with Tata aimed at hammering out a sale agreement for the British car brands. The company said separately that its December U.S. sales fell amid lower demand for both cars and light trucks.
Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 1.32 billion shares.
The Russell 2000 index of smaller companies fell 8.54, or 1.13 percent, to 745.01.